Michigan

Plum Market opens on Thursday

Alan Warren, The Ann Arbor News Mark Oley and Jordan Judge stock shelves in the rice section at the new Plum Market in the Maple Village Shopping Center in Ann Arbor.

"They'll take a little piece of everybody's pie. ... Plum Market will take a lot from Busch's, Kroger and those stores, but they'll take a little from the farmers markets, restaurants and smaller stores, too."- Robert Cantelon, co-owner of Arbor Farms Market.

Grocery retail is already a highly competitive business in food-savvy Ann Arbor - and that's why all eyes this week will be on Plum Market.

The metro Detroit-based grocer - whose first store in Bloomfield Township isn't even a year old - will open its 35,000-square-foot supermarket to the public Thursday in the Maple Village shopping center on Maple Road, near Jackson Road.
The full-service Plum Market specializes in natural, organic and local food and has a Zingerman's-themed coffee shop, a sushi bar, a See's Candies store, a salad bar and more than 1,200 varieties of wine inside.

Couple that with the fact that a second Whole Foods Market is under construction in Ann Arbor, and the stage is set for a retail battle.

34,019Number of U.S. supermarkets in 2006, defined as stores with sales of $2 million or more.

1.91 percentAverage net profit margin for a supermarket.

48,750 square feetMedian average supermarket store size in 2006.

$117.60Average weekly household grocery expenses in 2006 for a family with children.

1.9The average numbers of trips a week consumers make to a supermarket.

Source:Food Marketing Institute; Michigan Grocers Association.

"They'll take a little piece of everybody's pie," said Robert Cantelon, co-owner of Arbor Farms Market, one of the oldest natural foods grocers in Michigan. "Ann Arbor is a big food pie, but remember restaurant dollars are a part of that. ... Plum Market will take a lot from Busch's, Kroger and those stores, but they'll take a little from the farmers markets, restaurants and smaller stores, too."

Plum's location, however, while just off the Jackson Road exit of I-94, may prove a tough place to do business, said David Huntoon and Robert Kennedy of Intalytics, an Ann Arbor-based consulting company that helps retailers and restaurants scout locations.

"They are a high-end supermarket," Huntoon said. "The type of consumer they are going after has a combination of income, a certain lifestyle and is environmentally conscious.

"The thing that (Plum Market's) location doesn't have is a decidedly upscale demographic. ... Clearly you've got income out to the west toward Zeeb Road and you've got it to the north, but you don't have it in great densities near the store. There is no co-tenant adjacent that will help the store - it is pretty much on its own, and if it's going to appeal to a higher-income and well-educated base, it will have to pull people in from a wider west and north base."

The local grocery scene is a close-knit group of competitors. People like Arbor Farms owners Cantelon and Leo Fox have known Busch's founder John Busch and Whole Foods' state director David Lewis for years. Plum Market is owned by Matthew and Marc Jonna, sons of the Merchant of Vino founder Edward Jonna. That metro Detroit-based chain, which used to have a store on Plymouth Road, was sold to Whole Foods several years ago.

Matthew Jonna calls his Plum Market "the next evolution of a food store."

Stiff competition

Aside from chain department stores such as Meijer, here are some of the chief local grocery competitors with stores larger than 10,000 square feet in Ann Arbor. Trader Joe's and Busch's did not return calls seeking information about their stores.

What the rivals say

Here's what a few local grocers had to say about the increased competition Plum Market will bring to Ann Arbor.

• Jennifer Ferris, vice president, Bello Vino Marketplace
"I look at it as we are locally owned, locally grown, and I know they are doing a lot of the same thing, but I don't view competition as a bad thing," said Ferris, whose store focuses on local produce, including food grown on the family's Ann Arbor farm, as well as selling its 5,000 varieties of wine. "There are things about our store that define it and make it different. We like to eat and find great foods. We have a great staff. Everybody has something a little different to offer and we all have our own little areas."

• David Lewis, Michigan executive operations coordinator, Whole Foods Market
"In any market, our competition is anybody who sells food," said Lewis, who said that Whole Foods' accolades, such as being listed on Fortune magazine's 100 best places to work, being recognized for environmental consciousness and lauded for its wine selection, set the store apart. Lewis said he doesn't foresee much impact on Whole Foods because of its physical distance from Plum Market. "I don't think there can be too many places to buy great food," he added. "I think competition sorts itself out."

• Jim Hiller, owner, Hiller's Market
"While I certainly appreciate and admire that we have high-quality competitors, I don't think any of them operate in the air that we do, what we offer in terms of lifestyle products," Hiller said, noting that his stores carry 2,500 gluten-free products and hundreds of products that are peanut protein-free. "We target lifestyles, whether those lifestyles are imposed on people because of restrictions about what they can eat, or even if they choose a lifestyle based on the absence of corn syrups, for example. We are a destination. It provides us with a unique platform."

• Bob Sparrow, owner, Sparrow Market in Kerrytown Market & Shops
"A lot of our customers shop everywhere, literally. People buy stuff here and buy stuff at Whole Foods, too," said Sparrow, whose shop specializes in meat, seafood and produce. "A lot of it is service - I am here every day but Sunday and I wait on everybody here just about personally at the meat counter. ... I just don't think (Plum Market) is going to have that big of an impact. I know some merchants in town and nobody else is really worried about it."

• Matt Morgan, co-owner, Morgan & York
"We occupy a very specific niche. We are a full-service store, which is not all that common these days," said Morgan, whose store specializes in wine and cheese. "There is a finite amount of wine and food that is sold in this area and I think that more people trying to sell similar products will impact the marketplace. I think what happens though is the more the competition increases, the more pressure there is on people who are less good at what they do, particularly the people who are weakly differentiated. Having more competitors in town makes us better at what we do. It makes us focus more and improve our game."